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HB 3717 

1907 
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RECKING 
THE NATI&N 




The Crime 
of 1907-8 



True Causes of the Panic 
Stringency of Money and 
Idleness of Millions of Men 






WRECKING 
THE NATION 



The Crime of 1907-8 

True Causes of the Panic 
Stringency of Money and 
Idleness of Millions of Men 



PUBLISHED BY CO-OPERATIVE PUBLISHING CO. 
121 1-2 EAST TOWN STREET, COLUMBUS, OHIO 

The Phillips Printing Co- t T 4^g§|pp3 p s j ^ £ ast Q ay g tre et 



! Two Copies Receives 
f JAN 24 1908 

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Wrecking the Nation 
The Crime of 1907-8 



INTRODUCTORY. 

To those who have been watching the gathering of 
the storm clouds on our industrial horizon within the 
last twelve months, and who know and feel their im- 
port, politically and industrially, things look dubious. 
To them it looks as if we were drifting with the s*peed 
of a whirl-wind into a bottomless pit, from which there 
is no escape. 

To them it appears as if industrial chaos would 
reign supreme. They dread the impending crisis through 
ignorance, as a mother dreads the impending birth of 
her first born ; failing in her moments of remorse, to 
appreciate the pleasures that are to follow. In ignor- 
ance, men demand relief from a cause they have failed 
to notice in its approach. 

But to those who seek their knowledge in the de- 
velopment of our present system of production and dis- 
tribution, it appears as a dark cloud with a silver lin- 
ing, for they can honestly judge from cause to effect. 
They can see the changes that have taken place since 
yesterday and judge tomorrow by progress made today. 

They know that labor pains must come prior to 
the birth of the babe. They also know that darkness, 
misery and suffering is in store for the toiling millions. 

They know that our present system of production, 



4 Wrecking the Nation 

which is competitive, has practically changed to the 
co-operative. That which is left of the competitive 
system, must give way to its more efficient rival, the 
co-operative system ; or, in other words, the complete 
trust system, but as long as the producing masses still 
contend among themselves for the competitive system, 
instead of changing front to the co-operative plan, so 
long will there be misery, want, and starvation in a land 
of plenty. 

Today the battle is on among the heads of the dif- 
ferent trustified concerns for the complete mastery of 
the situation. This battle will be more decisive upon 
the affairs of human history, than was the battle of 
Waterloo. And no matter which of the two contending 
interests wins, in the name of greed and profit, the 
struggle will be so severe, thereby leaving the victor too 
.weak to enjoy his spoils of commercial warfare. 

We are now in the very throes of this battle, and in 
not understanding its purport, we are left in a condi- 
tion bordering on absolute helplessness. We dread to 
see the morrow approaching for fear that we may be 
the ones to fall in this decisive battle. 

And as yet the American people are helpless on- 
lookers, as though this struggle was no concern of 
theirs. But both interests have been preparing for this 
"battle royal" for over a year. Every device known to 
human ingenuity, to strengthen their position, has been 
brought into play. 

That these great interests have been able to gull 
the American people into the belief that this struggle 
is of no concern of theirs, only shows how well they 
have maneuvered their forces to hide the true import 
of this struggle. 

If you do not believe this, see how your public 



The Crime of 1907-1908 5 

press is honeycombed with news, other than the people 
ought to know. 

Banks and business failures are hidden in their col- 
umns or not spoken of at all. Thousands of men are 
idle and not a line or a reason why. But in big words 
the fact is displayed that "confidence is restored." 

If the true facts were known, the Robber Barons 
would tremble in their shoes ; for no king ever lived that 
would dare face an outraged American people, driven 
to desperation. 

But, thank God, we still have some intelligence, 
and when the fact dawns clearly upon our minds, that 
we, the producing masses, are the bone of contention 
on the part of these Robber Barons, then we, the great 
American people, will rise in our God-given might and 
take upon ourselves the spoils of war. 

DIRECT CAUSES THAT LED TO PANIC. 

We have today in our midst two mighty combina- 
tions of trustified wealth that are contending for suprem- 
acy in our industries. We see the powerful Harriman- 
Rockefeller Standard Oil-Railroad combine arrayed 
against the Morgan-Steel-Trust-Hill-Railroad combine. 
To both of these this struggle means to survive without 
either losing their identity. Neither can live without 
the other. Both are dependent upon one another for life. 

The railroads must have steel rails to replace old 
ones, or they will be unable to operate. 

Steel trust must have orders for steel rails, or their 
mills must cease operating, so we can see that they were 
unable to live apart without injury to each other. 

Under present conditions, of their own making, 
they are unable to live together in peace. YThe Harri- 
man railway combine objected to paying the price the 



Wrecking the Nation 



steel trust was asking for steel rails, which price they 
contended was extortionate. 

They prove this fact by the steel trust being able to 
sell steel rails thirty per cent cheaper in Europe and 
make a handsome profit; so, as a matter of retaliation, 
they refused to place orders with the steel trust for steel 
rails. V A11 rails they needed they bought from independ- 
ent mills./ 

The steel trust refused to lower their price for steel 
rails, and, furthermore, took exceptions to the Harriman 
Railway combine placing orders with the independent 
steel mills. 

\Such a course persisted in on the part of Harriman 
would mean ruin to the steel trust, for their very life de- 
pended on orders for steel rails. Harriman wished to 
dictate prices to the steel trust on steel rails. That the 
granting of this privilege would in time lead to control, 
seemed self-evident to the steel trust. / 

Another course that he might take would be to 
build his own steel rail plants, manufacture rails at cost 
for his own roads, thereby saving this vast amount of 
profit that the steel trust was taking upon itself. 

/The Harriman Railway combine was gradually get- 
ting possession of one railroad after another. If this 
kept on it would be only a question of time until every 
road in the country would be under Harriman's control. 
This fact caused individual railroad owners to resort to 
means to hold their own identity. Harriman's encroach- 
ments would eventually mean their destruction, so they 
allied themselves with the steel trust in an alliance to 
curb his growing power. 

If the steel trust did not wish to own the railroads 
personally, they would necessarily have to see that these 
roads should be owned and controlled by individual 



The Crime of 1907-1908 7 

power. By this means the roads would be more easy 
prey for steel trust exploitations. To the steel trust it 
seemed evident that many roads united could easily 
withstand its power for increased profits, and for it to 
live without successful opposition, trustification of rail- 
roads had to cease. 

* So we see individual railroad owners taking a posi- 
tion in alliance with the steel trust, which meant that 
they would either have to be exploited by the steel trust 
to hold their identity or be absorbed by Harriman's 
growing power. 

If Harriman could not be destroyed, then the steel 
trust, to hold its own identity as a concern of power and 
profit, would have to gain possession of the Harriman 
railroads, or otherwise Harriman railroad interests 
would in time gain possession of the steel mills. 

These contentions are the material causes that have 
led to the present panic — it could not be otherwise. 
Both being public utilities, and both having withdrawn 
their resources from the market, industrial collapse and 
panic had to follow. 

v To assist the steel trust in curbing Harriman's 
power, the government was called into the fray. It 
was suggested that the Harriman railroads were organ- 
ized in violation of the inter-state commerce law, there- 
fore the government was requested to dissolve this com- 
bination of railroads. 

In February the Inter-state Commerce Commission 
investigated Harriman's railways and his methods of 
getting possession of them. The fact vvas established 
that Harriman had powerful enemies who feared his 
growing power, but that these enemies were as deep in 
the mire of stock jobbing and railroad stealing as Harri- 
man. The government failed to make a case against 



Wrecking; the Nation 



Harriman whereby they could deprive him of his rail- 
roads. 

The government having made a failure of dissolving 
Harriman railroads, compelled the steel trust and indi- 
vidual railroad owners to act to bring about Harriman's 
destruction. ' That this would cause a gigantic struggle 
was apparent to those taking a part in it, but as it meant 
a question of survival of the fittest, faint heart had no 
chance in this quarrel. 

Upon J. P. Morgan, banker, devolved the task of 
accomplishing Harriman's ruin and the future life of the 
steel trust. He surrounded himself with financiers, past 
and present railroad kings, and enemies Harriman had 
made. Plans were quietly drawn, and the largest money 
pool in history was brought together. By the middle of 
March plans and preparations had been made to crush 
Harriman. 'Vast amounts of money had been placed in 
the Rockefeller national banks. On the morning of 
March 14th, checks running into the millions were pre- 
sented at the Rockefeller banks by the Morgan people, 
the object being to catch Rockefeller banks short of cash, 
which would have compelled Harriman-Rockefeller to 
dispose of the eight hundred thousand shares of Harri- 
man railroad stock they held in their vaults to get cash 
to keep up the requirements of the reserve. 

At the same time the Morgan people flooded the 
market with thousands of Harriman railroad shares, the 
object being to lower their value. 

Rockefeller banks got next to the scheme, called all 
their loans possible, and advised their friends not to buy 
stocks, as there was going to be a terrible squeeze. 

On the first day Harriman people sold quite a num- 
ber of railroad share in their aim to get cash, but they 
were able to keep the majority of stocks. 



The Crime of 190/-1 

The next day Cortelyou offered New York banks 
$25,000,000 to relieve the tightnes of money which had 
risen to 25 per cent. The Rockefeller National city bank, 
with proper security, was first up to the counter, and 
received this vast amount of cash, thus saving the day 
for the Harriman-Rockefeller-Standard-Oil interests, and 
with this vast amount of cash Harriman was able to 
retrieve his losses of the previous 'day. The Morgan 
people, in their failure to wreck the Rockefeller banks, 
lost the day, and Harriman was still master of his rail- 
roads. 

This was the first round of the big battle being 
fought out on our industrial field between these two giant 
industries. This skirmish was the showing of hands 
which only intensified a bitter struggle to survive. That 
this struggle could not be compromised became evident 
when both sides commenced to lay plans to destroy the 
other. ^That a struggle of such magnitude should in 
time affect the business of the nation can certainly be 
seen by a casual observer. Money was the prime requi- 
site to be used by both interests in the next struggle, 
and both now commenced to lay plans of offensive and 
defensive warfare. 

That every available dollar in America had to be 
brought into these pools of commercialism appears evi- 
dent, and now began the great money-hoarding period 
upon the part of these combinations. Every available 
avenue of productiveness was drawn upon for cash. 

In October the skillfully laid plans on the part of 
these two interests were prematurely exploded, and they 
were compelled to use their resources in another direc- 
tion. / The October panic was precipitated by the Heinze 
United Copper failure and the closing of the Knicker- 



10 Wrecking the Nation 



bocker Trust Company ' N . The stock market had been in 
a very critical condition on account of the tightness of 
money, and these two failures exploded prematurely a 
bomb that had been timed. All carefully laid plans of 
destruction at once went to pieces. \Call money on the 
stock exchange soared to 70 per cent. Runs were being 
started on different banks in New York City, the bribe 
of 70 per cent interest being too much./ The big inter- 
ests that had the money were afraid to let loose of it, as 
neither knew but what this move had been the plan of 
the other. 'The second day of the panic call money 
soared to 80 per cent. Some of the large banks com- 
menced to loan large blocks of money at this rate^ 

Things were getting worse by a very successful run 
being started on the Trust Company of America. This 
concern was the financial agent of the Tennessee Coal 
and Iron Company. • 

'The saviors of Wall Street were getting frightened, 
for who knows what a fickle public might do? The peo- 
ple might accidentally get a notion into their heads to 
make a run on Rockefeller's National city bank, or they 
might go after the Morgan banks, take out their money, 
and themselves loan it at from 80 to 100 per cent. v 

Heroic action was now necessary. To stem the tide, 
we see the spectacle of Harriman and Morgan together 
laying plans to save the day which was brought about 
by the conniving and scheming on their part to wreck 
each other.. 

We now see the large money hoarders, Morgan and 
Rockefeller interests, placing millions of dollars into the 
stock market to bring down a high rate of call money. 
We also see the Secretary of the Treasury placing mil- 
lions into the breach to assist these men in staving off a 
tidal wave of their own making. The thing happened 



The Crime of 190/-1908 11 

that the conspirators did not wish to see — the public's 
loss of confidence in their banks. 

The last day of the panic, call money rose to 100 
per cent. Millions were being withdrawn from New 
York banks, which were now unable to keep up their 
reserve, and to alleviate this state of affairs, clearing- 
house certificates were being issued. * But it was too 
late ; the resources of the nation had been taxed to their 
utmost ; money, the life blood of the nation, had been 
withdrawn from circulation, and industrial stagnation 
had to follow. 

If it takes the energy of two public utilities to give 
motion to prosperous times, and these energies are with- 
drawn, a panic can be the only result. To again have 
prosperous times, these energies must be returned into 
the channels of trade, where they rightfully belong. 

But it appears that the struggle between these two 
mastodons can only be settled when the one has absorbed 
the other. To accomplish this it may mean the wreck- 
ing of the nation. 

Will they do it? 

In the following chapters we give an account of the 
main events that have transpired between these two 
forces within the last year. 

GIVE THE PRESIDENT HIS DUE. 

Whatever may be said against President Roose- 
velt, by the two powerful interests in the United States, 
in regard to his policy, the fact stands forth, both in the 
March and October panics, that he, through the secre- 
tary of the treasury, spoiled a game of destruction on 
part of these interests, that in itself would have brought 
forth all the antagonism at their command. 



12 Wrecking the Nation 

That the government assisted in forestalling an 
objective crime on part of these men, goes beyond say- 
ing. 

The plans consummated would 1 have meant the com- 
plete trustifying of the steel and railway interests in one 
massive combination. 

So when men are thwarted in a purpose, it causes 
them to throw self-control to the winds. These men 
had a purpose in view, regardless of the suffering it 
might cause. 

What the government did from March to Novem- 
ber to resist a panic of great magnitude, can only be 
appreciated by those who understand the principle of 
profit, dividends and banking. 

From March to November the Secretary of the 
Treasury deposited with banks and issuing of govern- 
ment bonds, upon which a circulation could be created, 
a total of $350,000,000. ' 

Certainly a very stupendous amount. This in itsell, 
taxed almost the entire resources of the nation. 
This vast amount of money gave relief to those who 
were entwined in a spider's web, woven so finely in the 
name of high finance, that escape appeared impossible 
on part of the victims caught. 

But even the government, coming to the rescue as 
it has, must sooner or later meet this same powerful 
enemy on part of the American people. This enemy 
corraled his forces in March and October, and before 
many days have rolled around he will strike again only 
with a force and cunning greater than before. 



The Crime of i pay- 1908 13 

HARRIMAN-FISH SOCIAL FEUD. 

In the summer of 1906, Mr. Harriman, the silent 
wonder of American railway concentration, made a re- 
quest of Mrs. ^btuy vesant Fish, to introduce his daugh- 
ters into New York high society. Mrs. Fish, through 
her husband, enjoying the position as president of the 
Illinois Central Railroad, stood high in the social realm; 
in fact she had reached the position where she stood 
ready to contest with Mrs. John J. Astor for supremacy 
and leadership of the New York's 400. 

The Harrimans, personally, never cared much for 
the social whirl, but they did wish that their daughters 
should enjoy all the privileges and honors becoming a 
man of Harriman 's wealth and influence. 

Mrs. Fish absolutely refused to yield to Mr. Harri- 
man's request, and this refusal on her part at once pre- 
cipitated a crisis. That Mr. Harriman's pride was hurt 
goes without saying. To retaliate, he made up his mind 
to humble the Fishs for this flippant denial of his social 
rights. 

He felt that the only way he could humble Mrs. 
Fish was through her husband. So Mr. Harriman 
quietly commenced to buy Illinois Central Railroad 
stock. He also brought to his side the powerful house 
of John J. Astor, Cornelius Vanderbilt, Walton Goelet 
and the Rockefellers. Quietly, this silent man laid the 
trap into which Mr. Fish, unconscious of the storm 
gathering, was walking into. Mr. Fish felt confident 
of re-election as president of the Illinois Central at 
the November stockholders' meeting. N Imagine his 
chagrin, when at the meeting of the stockholders, he 
found himself deposed as president of the Illinois Cen- 



V 



14 Wrecking the Nation 

tral through Astor, Vanderbilt and Goelet, and in his 
place Harahan elected, a tool of Harriman/ 

To those familiar with newspaper accounts of a 
year ago, it will probably seem strange at the bitter- 
ness exhibited on part of both factions. Animosity and 
hatred was the keynote of that stockholders' meeting. 
It could only be natural that Mr. Fish would seek 
revenge because he felt he had been betrayed by his 
friends. 

This meeting was the opening gun that has arrayed 
the wealthiest families of New York on one side or the 
other. Neither men have overlooked the opportunity 
to injure the other. 

ITS EFFECT ON WALL STREET. 

That a feud of such enormous proportions should 
effect the stock market goes beyond saying. 

That the powerful influences of these families 
should be felt until the foundations of our financial and 
industrial life would be placed at stake, has too well 
been demonstrated. 

That the bitterness of this feud can only be settled 
after the one or the other faction has been vanquished, 
is a question of serious doubt. 

That the feeling of the American people in this 
matter has very little weight, has also been demon- 
strated. 

v On January 1st, 1907, John D. Rockefeller gave to 
the American people his celebrated prophecy of 7,000,- 
000 idle men before the ending of the present year./ 

At that time the public press took exception to his 
statements and presented the rosy view of prosperity 
and with facts and figures endeavored to disprove 



The Crime of 1907-1908 15 

this statement. But J. D. Rockefeller is a prophet of 
prophets. He knew and saw a condition facing the 
American people, such as our public press was not 
aware of. 

For who knows the condition best of his own house- 
hold than the father thereof? He knew that at this 
moment, his entire fortune had to be at the disposal 
of his protege, Harriman. He knew that the lines of 
demarkation were being drawn tighter, day by day, 
around his protege, and that the day was not far dis- 
tant when every available dollar would have to be 
placed in a pool of defensive alliance with others that 
were being drawn into this "battle royal." 

Regardless of his prophecy as to what he termed 
"unwarranted attacks by the government against his 
properties," he knew that the significance of this coming 
struggle was deeper than the facts as they appeared on 
7 he surface. 

For well has the poet spoken : "Those whom the 
gods wish to destroy, they first make mad." 

WHO IS HARRIMAN AND WHY DID THE STEEL 
TRUST FEAR HIS POWER? 

This wonderful man, who was five-tenths audacity 
and five-tenths silence, commenced his railway career 
in 1901, by getting possession of the Southern Pacific 
and placing a loan on this property of $100,000,000. 

By the beginning of 1906 he was considered a king 
amongst kings. 

Through the interests that he represented he was 
in absolute control of 32,150 miles of rail, at a capitali- 
zation of $2,360,000,000. 



l(j Wrecking the Nation 

That this man should be feared and should have 
made enemies, has long ago been demonstrated. 

He also was the largest buyer of steel rails in the 
United States. 

That he objected to paying the exorbitant price the 
steel trust was demanding for its rails is proven by his 
buying steel rails wherever possible from the inder 
pendent steel mills. That from this fact it was an easy 
matter to get the support of the steel trust in any move 
that might be made to crush Harriman's increasing 
power, is easily understood. The steel trust feared this 
man more than its competitors. 

The steel trust wished to dictate prices to all 
comers, and wished to see free competition in railway 
lines, so that they could more easily extort their price 
on steel rails, with the least resistance on part of the 
buyer, for one railroad alone could not stand against 
the policy of the steel trust. But many roads united 
might wage an effective warfare against this combine 
to bring it to reasonable terms and probable ruin. 

So in Mr. Harriman they saw a man accomplishing 
the very thing they did not wish to see. They saw 
looming up in the distance a powerful railway combine, 
whose power would be thrice-fold as great as theirs; 
that it would only be natural for a powerful railway com- 
bine to wish to own its own steel mills wherewith to 
manufacture their own trails and save this immense 
amount of profit the steel trust was taking upon itself, 
seemed evident. It would mean millions of gain in the 
coffers of the railroad trust and a proportionate loss to 
the steel trust. 

The steel trust felt that it was imperative to 
destroy the railway combine led by Harriman and his 



The Crime of 1907-1908 17 

associates and get possession of these roads themselves, 
or they would, in time, be destroyed by his growing 
power. 

By the first of 1907 plans and lines were commenc- 
ing to be drawn to crush Harriman and his associates. 
' That the most powerful money pool in history was 
necessary to accomplish this end looks plausible. 

For in destroying Harriman and his associates, 
they were placed in a position to save themselves. For 
in such a battle royal, the victor might be carried down 
to defeat with his victim. 

The thing had to be carefully managed so as not 
to affect the business of the nation too severely, or else 
the American people might get next. 

This factor demanded secrecy on part of the pei- 
sons interested in the plans so well formulated, for if 
the people had known what was up, the fact stands 
forth, that such pressure might have been brought to 
have compelled the government to act in a line against 
the steel mill, as it was acting against Harriman 's rail- 
way interests. 

These things being understood, Harriman had little 
love for J. P. Morgan, organizer of the steel trust. 

7 The management of this powerful pool to destroy 
Harriman was placed in the hands of Morgan, who sur- 
rounded himself with a coterie of financial lieutenants 
that any general might have been proud of. 

Past and present railway kings, men who had re- 
tired from active business and those who were still in 
the business were brought into the fray. Even Andrew 
Carnegie was brought from retirement to a realization 
of the import of this struggle and threw his millions in 
steel bonds into the fray to protect that which meant 
his all. 



18 Wrecking the Nation 

Ryan, the street railway king, and George Baker, 
president of the First National Bank, gave their aid. 

D. Willis James, retired copper king, came also. 
J. H. Mill, money king, whose power as a money man 
was known to only a few, pledged his resources. Keene 
was in the fray up to his neck. His hatred of Harri- 
man can he traced to the time Keene blamed him for 
the failure of his son-in-law's brokerage business. Also 
how Harriman walked rough-shod over him in the 
Southern Pacific deal. 

Stuyvesant Fish, with George Gould, were willing to 
sacrifice their all and take leadership under Morgan, to 
wrest the railroads from Harriman. 

STUYVESANT FISH RAPS STOCK EXCHANGE. 

On January 1st, 1907, the Journal of Commerce 
published an interview with Mr. Fish, in which that 
gentleman expressed' himself on how business was being 
done on Wall street. That he was qualified to talk on 
this subject, goes beyond saying. He stated that the 
New York Stock Exchange had ceased to be a free 
market where buyers and sellers fix prices through the 
ebb and flow of supply and demand. 

That it had become the plaything of a few mana- 
gers of cliques and pools to such an extent that for 
months past every announcement of increased dividends 
of stock distribution and rights, has been met by falling 
prices. 

That the government was getting ready to show its 
hand was apparent. That the government had informa- 
tion in reg-ards to some interests was certain. 

Now, from what source did the government receive 
its information? 



The Crime of 1907-1908 19 

Mr. Fish was an enemy of Mr. Harriman, and 
what would weaken the Harriman-Rockefeller interests 
more than an attack by the government? He felt that 
these attacks would depress the Harriman-Rockefeller 
interests so as to make some of their interests almost 
worthless in the eyes of the stock-buying public, re- 
gardless of the dividends declared on these stocks. By 
these attacks he felt that with the powers at his back 
he could again regain control of the property he had 
lost and regain the presidency of the Illinois Central. 

That it appeared that the entire interest of the gov- 
ernment were in operation to dominate and influence 
the market was manifest on every side. 

Seldom had the stock gamblers been so unanimous 
that stocks would fall in value. 

HARRIMAN'S STOCK WEAK. 

The fore part of January, Harriman railway stocks 
commenced to weaken, which fact caused the Rockefel- 
ler interests to come to their rescue by buying heavily. 

At the same time an onslaught was being made 
against Amalgamated Copper by outside interests. 

This also compelled the Rockefeller interests to 
protect themselves along this line. 

These are the Harriman stocks mostly affected, 
which he controlled through the interests he repre- 
sented : 

Union Pacific. 

Capital Stock $295,000,000 

Bonded Debt 200,000,000 

Southern Pacific. 

Capital Stock $237,000,000 

Bonded Debt 371,000,000 



20 Wrecking the Nation 

Oregon Short Line. 

Capital Stock $ 27,000,000 

Bonded Debt 76,000,000 

Oregon Railroad. 

Capital Stock $ 35,000,000 

Bonded Debt 21,000,000 

He also held thousands of shares in Illinois Cen- 
tral, Baltimore and Ohio and New York Central. 

About this time Harriman placed an order with 
the Bethlehem steel mills for 22,500 tons steel rails at 
$32 a ton to show his contempt for the steel trust. 

Harriman, through the control of these western 
roads, placed George Gould in a peculiar position. 

This gentleman found himself hemmed in without 
an outlet to the coast, so he was compelled to build the 
Western Pacific as a defense property. 

This did not increase his love for Harriman in the 
least, and we find him assisting Mr. Fish in his fight. 

At the same time we find Banker James Stillman 
hurrying off to Europe. His reason was bad health. 

Did Mr. Stillman, president of the Rockefeller Na- 
tional City Bank, seeing the gathering from afar of the 
storm clouds, hurry off to Europe for assistance? 

PLANS CONCEIVED WEEKS AHEAD. 

Plans on the part of the Steel Trust interests to 
crush Harriman and his associates were laid 
weeks ahead. \ Even to throw the wool over the 
victim's eyes, it was reported that Morgan and Rocke- 
feller went into an international pool to advance steel 
stocks. , Hill patched up a truce with Harriman, by 
compromising their differences ; Hill taking Portland as 



The Crime of 190 /- 1908 21 

an outlet for Northwestern and Harriman taking Seattle 
for his outlet for Union Pacific. 

Things looked so good to Harriman that he at once 
became active by commencing to buy heavily in New 
York Central stocks. 

The Standard Oil interests became active in cop- 
per, by buying the Green properties. By getting pos- 
session of these interests gave them 67% of the total 
output of copper in the United States, and -±0% of the 
world's output. 

Everything appeared to be coming Harriman's way 
as far as Wall street was concerned. y In the meantime, 
though the government was going ahead with its case 
against Harriman, the Inter-State Commerce Commis- 
sion was to meet in a few days to investigate Harriman's 
railroad deals and stock-jobbing, but in the face of this 
Harriman stock held up well. N 

Inquisitor Kellog, of the Inter-State Commerce 
Commission, had been for years an attorney of J. J. 
Hill, so a man better qualified than he could not have 
been found to uncover Harriman and his methods in the 
investigation that was to follow. 

By February 1st things looked very harmonious 
from a Harriman standpoint. At this time there was a 
heavy decline in Morgan-Hill securities, held in North- 
western railroad. 

Also interests had been to Washington to inter- 
cede for Harriman-Rockefeller to have the government 
cease prosecution against their properties. They pre- 
dicted a calamity if these persecutions did not cease. 

In the fore part of February, George Gould bor- 
rowed $50,000,000. / There was a heavy selling of North- 
western, which fact caused a heavy decline in this 
stock. If it were, a bait for Harriman, that eentleman 



22 Wrecking the Nation 



^ 



refused to take advantage of it. This decline was very 

mystifying to the stock gamblers, who understood that 

^Northwestern was held in a pool in J. P. Morgan's office. 

From the looks of things it appeared as if some 

one was endeavoring to get cash at all odds. 



THE PLOT THICKENS. 

That the Morgan steel trust pool was after cash 
became apparentN It was reported that Morgan made 
a foreign loan of $125,000,000. 

The impression was left that they wished to finance 
Northern Pacific railroad. 

That Hill had little use for Harriman became mort 
apparent. Harriman had wrested control of the St. Joe 
and Grand Island from him, and later on selling it to 
the Union Pacific at a good profit. 

Further facts commenced to assert themselves that 
the Big Four, Harriman, ShifT, Gould and Stillman, had 
taken $60,000,000 profit out of Chicago and Alton by 
heavily watering its stock. 

'Flarriman blamed Fish for having taken his 
troubles to the President and that he was furnishing 
evidence showing the government where to strike first./ 

So Harriman, to get even, threatened to give to the 
Inter-State Commerce Commission the inner workings 
of the Northern Pacific steal. 

The stock market commenced to move downward, 
and even the banks failed to support it. Speculators and 
investors were up a tree. Those who held stock could 
not account for the decline. 

Those who wished to invest felt suspicious as a 
report became current that the administration had said: 
Harriman must go. 



The Crime of 1 90 7 -1908 23 

To remove this doubt, Harriman made a hasty trip 
to Washington to intercede in his behalf and his asso- 
ciates. 

Harriman stocks commenced to fall and Hill-Mor- 
gan stocks were in the same boat. Steel stocks were 
also moving downward, through the Harriman inter- 
ests commencing to cancel orders for steel rails. 

Pennsylvania was also seeking to abrogate orders 
for steel freight cars. 

By March 5th, things commenced to shape them- 
selves. That both big interests were commencing to 
move their forces along stragetic lines became apparent 
to those within the deal. Those who were next to the 
inner workings were commencing to sell their stock 
for ready money. A big money pool was now being 
gathered together to be used at the logical moment to 
crush Harriman. 

The idea was to support the market in places, then 
dispose of holdings, at a good price, then let the market 
move downward. / 

On March 5th stocks went tumbling to a new low 
level. 

A raid was directed against Union Pacific and 
Amalgamated Copper. 

The intention of this was to weaken Harriman- 
Rockefeller interests and compel them to seek cover, 
by covering with cash and heavy investments, to pro- 
tect their interests. For the less actual cash Harriman- 
Rockefeller would have at the critical moment, the 
easier a prey they would be. 

To disguise this movement Atchison Railroad 
stocks were broken, thereby bringing down Hill-Morgan 
stocks. Even with Northwestern at low levels, Tames 
Hill was the happiest man in Wall street, for he felt 



24 Wrecking the Nation 

sure it would only be a question of hours till they would 
have their prey (Harriman) securely vanquished. 

They had Harriman guessing, and it appeared that 
he was forced to sell stock, as he had a note due at an 
early day providing for the purchase of B. & O. stock 
for Union Pacific treasury. 

Just at this time the President signed the Aldrich 
currency bill, which in a few days would show its 
efficiency of saving the day for Harriman-Rockefeller 
interests. 

MARCH 5TH TO 12TH. 

From March 5th to 12th developments came fast 
and furious. 

Harriman had made up his mind to defy the Presi- 
dent by at once commencing an ocean to ocean railroad. 
In this he had the support of Frick, of the Reading Rail- 
road. 

Harriman \s stocks at this time became firm, while 
Morgan's stocks were weak./ The Morgan people, 
through different brokers, were heavy sellers of then 
stock, and endeavoring to buy Harriman's securities. 

The appearances of the markets now denoted that 
the Morgan people had the money and the Rockefeller 
people had the stock. Rockefeller people were advising 
the holding- and buying of their stocks, while Morgan 
was discouraging the speculators to leave Harriman- 
Rockefeller shares alone. 

/ Two more factors that added distress to the money 
market were that the Pennsylvania Railroad had notes 
due of $12,000,000, and Northwestern $25,000,000. 

J. P. Morgan, to save Southern Railroad stock, had 
a dividend declared out of the surplus. This dividend 
was not earned, and could not be justified. Here he was 



The Crime of 1907-1908 25 

doing what others had been accusing Harriman of hav- 
ing done. 

Mr. Gould had Mr. Fish placed on the Missouri 
Pacific Board as a slap at Harriman, and for the purpose 
of developing a low-grade line against Illinois Central, 
Gould and Rock Island interests, which were controlled 
by Morgan, formed an offensive and defensive alliance 
to further cripple Harriman, if possible. J. P. Morgan 
and his associates held close to one-half million shares 
of Union Pacific, Reading and other Harriman interests. 

E. H. Harriman, personally, had 400,000 shares of 
stock, and 800,000 shares were locked up in the National 
City Bank. 

. Previously, the Morgan interests had become heavy 
depositors at the National City. They had placed mil- 
lions in this bank, and for no other purpose than to 
catch this institution short in cash. / 

From the looks of things, it appeared that they had 
Harriman foul. The battle lines had been drawn about 
this man silently and effectively. Escape appeared im- 
possible and ruin was staring him in the face. 

The thing most dreaded, though, was the fear of a 
panic that would shake this nation from border to bor- 
der and ocean to ocean. So Mr. Morgan took a hasty 
trip to Washington to apprise the President of his plan 
of action and emphasize the need of money to stave off 
a possible panic. 

These matters being attended to, Mr. Morgan left 
for a trip to Europe, to be miles away from the skirmish 
lines, where no pleading voice could intercede with 
him to stop the slaughter of the innocent. 



26 Wrecking the Nation 

MORGAN LEAVES FOR EUROPE. 

Imagine your are standing on a high 'pinnacle and 
gazing down into a valley, fertile and rich, and directly 
yon see two opposing armies coming out of a defile in 
opposite directions. Their mission is destruction. See 
the positions taken by both sides, and the strategic 
points of vantage taken possession of. See the ont 
leader spinning a web about the forces of his opponent. 
See the hopelessness of this struggle on the part of the 
one who is about to be vanquished. 

Hold your sympathetic heart a moment and think 
of the wives and babes of the fathers, of the remorse 
and anguish that must follow this struggle. 

Se this spider-like web that is prepared for the 
fly to trap itself in, and oh ! how we would like to warn 
them of their folly. 

And after the plans and preparations have been 
made, see the leader give his last instructions to his 
faithful lieutenants ; see him pointing out the positions 
of vantage that they have possession of; see him with 
pride point to his reserves, in case the victory is not 
won on the first onslaught, and then with a wave of his 
hand, he points out to them the wealth that will be 
theirs on the morrow. 

He speaks to them of fertile valleys and riches 
galore ; of the enslavement of the nation that profit's 
greed will command, and then he pledges them to 
secrecy and faithfulness to accomplish a common pur- 
pose — the destruction and annihilation of the enemy. 

/tie bids them adieu as his courage fails him to stay 
and see the carnage and destruction that his skillfully 
laid plans will accomplish. 

He sails for Europe. 



The Crime of 1907-1908 27 

WEDNESDAY, MARCH 14TH. 

The Morgan interests had weeks previously placed 
millions of deposits with Rockefeller's National city 
bank. They now commenced to check out on these de- 
posits by certified check. f 

This meant that if the Morgan interests presented a 
certified check for $10,000,000 on their money deposited, 
the National city bank would be compelled to hold this 
money. Under ordinary conditions the National city 
bank would have loaned this money, and this they had 

done. 

This was a trick on the part of the Morgan inter- 
ests to make National city bank's cash low, so that after 
they commenced to make a drive on Harriman-Rockefel- 
ler railroad interests, the National city bank would be 
absolutely helpless to come to Harriman-Rockefeller's 
rescue, as in this battle royal money would talk. 

The National city bank discovered this trick in 
time. They knew that the moment this money was 
checked out, call money would soar from 20 to 30 per 
cent. This move on the part of the Morgan interests 
compelled the National city bank to call their loans 
from their friends in order to hold a sufficient cash bal- 
ance to meet the need of the Harriman interests and 
protect their reserve. 

They also, at the same time, warned their friends 
not to buy stocks. One of Harriman's associates bor- 
rowed $10,000,000 at 6/2 per cent interest, giving $30,- 
000,000 collateral security. 

The Morgan interests, the moment they had their 
accounts checked against the National city bank, com- 
menced a fierce bear movement, by furious selling of 
Harriman railroad stocks. This brought about a great 



28 Wrecking the Nation 

demoralization of the stock market, and fancy stocks hit 
their lowest level. 

Call money at once jumped to 25 per cent. 

Harriman, it is claimed, had 400,000 shares of his 
own stock ; National city bank held 800.000 shares. 

^The motive was to force Harriman and the National 
city bank to disgorge this stock. Morgan and his lieu- 
tenants stood ready to gobble it up with cash. There is 
no denying but that the Morgan interests had plenty of 
cash to buy with. 

It is assumed that Morgan people had in the neigh- 
borhood of 400,000 shares, and they figured on the Rock- 
efeller interests disposing of 400,000 shares to save them- 
selves. This would have given Morgan control, and 
ended Harriman 's existence as railroad king. 

Great Northern stocks hit low level, but Mr. Hill 
was happy, as there was no danger of any one getting 
this stock, as they had kept Harriman busy defending 
himself. 

This day was considered the worst the stock ex- 
change had suffered in thirty years. 

Never before had two interests met in such a gigan- 
tic battle; never before had two such speculative inter- 
ests contested with one another for supremacy. That the 
Rockefeller interests were compelled to keep on the de- 
fensive the first day, goes without saying. 

This was a fight that they had hardly prepared for. 
The shrinkage in stock values had been enormous.- Men, 
in their excitement, threw their stocks over for a song to 
get money. Everybody was in need of money, but no 
money was to be had except at an exorbitant rate. 

Through all of this, Harriman kept cool and mar- 
shaled his forces for the morrow. The Morgan interests 



The Crime of 1907-1908 29 

had things planned to cripple Harriman the first day and 
destroy him on the second. 



THURSDAY, MARCH 15TH. 

On the second day the Morgan people danced with 
glee; their delight knew no bounds, for they thought 
they had Harriman cornered. Things looked so good 
for Morgan and so bad to the stock exchange, that Sec- 
retary Cortelyou came to the rescue of the money mar- 
ket to relieve the stringency manifested on a high rate 
of call money. 

Mr. Cortelyou made his offer of buying $25,000,000 
of bonds, as he felt certain that this vast amount of 
money would again bring the stock market to a normal 
condition. But, lo and behold, the National city bank 
was the first one up to the counter. 

/This saved the day for Harriman, as it gave him 
much needed cash, and as he would 1 sell one share of his 
stock, his brokers would buy two. By doing this he was 
able to retrieve his losses on the previous day at a hand- 
some profit. 

Harriman worked quietly in buying stocks and de- 
plored the panic. 

The Morgan interests, through Keene and his lieu- 
tenants, sold over 200,000 shares. 

Keene, himself, is reputed to have sold 200,000 
shares of his own in connection with the Morgan stocks. 

Keene and Fish had been on Harriman's trail for 
weeks, and this was a delight for them, for they thought 
they were settling their last scores with the railroad 
king. 

Late in the day the Morgan people became worried 
because Harriman did not call for help, and started an- 



30 Wrecking the Nation 

other furious drive in Reading Railroad stock and Union 
Pacific. 

But it was too late. They had counted their chickens 
before they were hatched ; the prey they had been so 
longingly counted on had out-maneuvered them and 
slipped through their hands. 

After the 'day was over, the Morgan people discov- 
ered they had in the neighborhood of 600,000 shares of 
Reading and Union Pacific stocks, which they learned 
came mostly from small investors, who, in a delirium of 
fright on a rising call money market, lost their wits and 
fortunes. 

FRIDAY, MARCH 16TH. 

The Morgan people still thought that Harriman had 
lost control of the Union Pacific, but they kept on buy- 
ing. William Rockefeller astonished Wall Street by 
coming out in a statement that they had been buyers of 
Harriman interests through the entire struggle, and 
those who were now throwing overboard their stock at 
a loss, would regret it later on. 

The fact became plainer now that the Rockefeller 
interests had been heavy buyers, and all the Morgan 
people got possession of came from small investors. 

It is asumed that it cost Harriman and Rodgers 
$25,000,000 to protect themselves, but even with these 
immense losses, Harriman recovered his position within 
twenty-four hours, and was speaking of taking a vaca- 
tion. 

Through the entire struggle Europe was guarding 
her gold by raising her rates against the United States. 

This bitter family feud emphasized itself by crushing 



The Crime of 1907-1908 31 

gamblers and small investors alike; for thousands lost all 
and were forever forced out of the market. 

Stocks commenced slowly to recover their positions, 
but it was a bitter lesson for the small man. All the 
coaxing and bowing on the part of the big men that took 
part in this battle can never bring this small investor 
back to pick the chestnuts for the big fry./ It was a thun- 
derbolt out of a clear sky that eliminated this small man, 
and these lessons are not soon forgotten. 

The shrinkage in stock values that had taken place 
in the last six months had been estimated at $3,000,- 
000,000. 

This fact, above all others, assisted in demoraliz- 
ing the little investors at the crucial moment. In fact, 
the action of the stock market for several weeks previous 
had the small investors, as well as the bankers, guessing. 

QUARREL AMONG THE RICH. 

'The effect of this panic could hardly be felt by the 
industrial interests throughout the nation. Even with 
their bitter feud in endeavoring to get control of the 
railroads of the nation, the aggressive interests did not 
wish to destroy the prosperity of the nation. 

Above all, this was a calamity they wished to avoid. 
Such a thing would bring about a greater shrinkage of 
values, and this was something that they did not wish. 
''The people were confident of their industries and 
producing capacities, and therefore it was a very easy 
matter for our press to explain that it was a rich man's 
quarrel that could not affect the prosperity of the nation./ 
The public still had confidence in their banking institu- 
tions and everything moved along as if nothing had hap- 



32 Wrecking the Nation 



& 



pened. In fact, our press said as little about this giants' 
struggle as possible. 

This was the first round of a great struggle between 
contending interests, and no one was hurt much but the 
small investors and stock gamblers. 

But the men who had taken part in this struggle 
knew it was something of greater import than driving 
the little fellow out. They knew now that hands had 
been shown and henceforth it would be more of an open 
fight. 

Neither of the interests would be caught napping 
by the other in the future. Every move on the part of 
either one on the national checkerboard would be thor- 
oughly weighed and the consequences considered. 

That the great American people, above all, had to 
be kept in ignorance of the true significance of this 
struggle had to be given consideration ; for, above all 
things, these robber barons dread an outraged people. 

Neither knew which would be the victor in the next 
round. 

How well our public press served their purpose has 
been emphasized in the October panic. The stock mar- 
ket from now on was listless. The big interests were 
gradually recovering from their titanic struggle and were 
commencing to reorganize their forces for the next 
round, which would take place six months hence. 

Stuyvesant Fish admitted that stock jobbing could 
not be stopped by legislation and that the only way it 
could be stopped was by getting rid of dishonest officials. 



The Crime of 1907-1908 33 

CINCINNATI ENQUIRER, MARCH 17TH, 1907. 

"The escape of Mr. Harriman from what looked 
yesterday like a Waterloo is all the more remarkable, 
for never before in the history of the financial market 
have so powerful men allied themselves in a pool as in 
theAttack on Harriman. 

"Andrew Carnegie was brought forth from retire- 
ment and brought ten millions of cash as ammunition. 

"John S. Kennedy, white-haired and feeble in body, 
but a colossus in high finance, was brought also into the 
battle. 

"D. Willis James, the quiet but mighty copper king, 
came also. 

"John H. Millbank, the money king, whose power is 
only known to a few of the great ones in Wall Street, 
was drafted into service. 

"J. P. Morgan, through his remarkable lieutenant, 
Thos. F. Ryan, arranged the plan of campaign, and to 
George F. Baker, president First National bank, was in- 
trusted the delicate matter of financing the enterprise. 

"According to Wall Street whispers, the actual plans 
of the campaign were laid weeks ahead; all the cash the 
combination could secure was desopited in the banks 
controlled by Harriman and his friends of the Standard 
oil party. 

"J. P. Morgan was informed by the President that 
Harriman must go, and Mr. Morgan is said to have 
given definite assurance that Harriman would be dis- 
posed of, providing the Secretary of the Treasury stood 
in the breach to prevent a panic. 

"Morgan sailed for Europe leaving positive orders 
behind, and by putting himself in mid-ocean, placed it 



34 Wrecking the Nation 

beyond the control of himself, or any one else, to change 
the program. 

"On Tuesday the Standard people discovered the 
trick which was to be played, for the trick was extremely 
simple, and could have but one meaning. All the mil- 
lions of cash deposited by the Morgan combination were 
checked out of the Rockefeler banks at once. 

"Checks running into millions were presented at 
Standard Oil banks to be certified. 

"To appreciate the weight of such a blow it must 
be understood the minute the check is certified the bank 
is compelled to hold in reserve every dollar represented 
by the check, and dare not use it for any other purpose, 
although it is still compelled to remain custodian over 
the funds. 

"The moment these checks were certified the Stand- 
ard Oil people knew that money would soar to ten, 
twenty or thirty per cent. 

"They were compelled to call loans from their 
friends to restore cash balances while holding these mil- 
lions of idle money for the Morgan people./ 

"They saw the trick the very moment the first card 
had fallen from the hand of the other side, and instantly 
warned their friends not to buy stocks or borrow money 
for a few days, as there was going to be a squeeze. 

"When the show-'dbwn came on Thursday night the 
Morgan-Carnegie-Baker combination discovered that 
they had purchased about six hundred thousand shares 
of Union Pacific, Delaware Hudson, Chicago Northwest- 
ern, Illinois Central, B. & O., but that Harriman seemed 
to have as much stock as when they started." 



The Crime of 1907-1908 35 

RAISING PRICES THROUGH SUMMER 
AND FALL. 

The manufacturers saw that we were rapidly ap- 
proaching a crisis, so to dispose of their surplus products 
successfully, it had to be done on a rising market, based 
on confidence and credit, and gradually we saw a rising 
market in the necessities of life — foodstuffs, meats, eat- 
ables of all kinds, and wearing apparel. It appeared as 
a large soap bubble that could never burst. 

Traveling men were impressing it upon the minds 
of merchants that now was the time to buy, that every- 
thing would be higher by fall, and in buying through 
the summer the merchant would save a vast amount of 
money. 

The merchant himself was ignorant of the direct 
causes at work through the misrepresentation of our 
public press, who did their work nobly in hiding the true 
state of affairs. 

Thousands of merchants over-bought from five thou- 
sand dollars to one hundred thousand dollars. They 
were sincere in buying these goods and one and all ex- 
pected to realize a fortune on the part of their foresight 
at what they were made to believe were low values in 
contrast to what these goods would sell at in the fall. 

The scheme worked, and worked well. This vast 
over-production on the part of the working class is now 
lying on the shelves of the merchants, and not in the 
warehouses of the manufacturers, as it was in 1893. 

The truth is, the merchant has been imposed upon 
by his fellow brother in business, who is now preaching 
confidence and cheerfulness to him to assist himself in 
moving this vast amount of goods off his shelves. 

They are also impressing upon his mind not to can- 



36 Wrecking the Nation 



«b 



eel orders placed, as that would destroy prosperity and 
bring about the very thing he is facing — failure and ruin. 
This is poor logic to a business man who has thousands 
of dollars worth of unsold goods on his shelves. 

EFFECTS THROUGH THE SUMMER ON 
STOCK EXCHANGE. 

All through the summer months the stock market 
was in an irregular shape, the interests tried in every 
way to get the public interested, but the public would 
not, as they had come to Mr. Fish's conclusions, that 
it was dominated by few cliques who regulated it to suit 
themselves. 

It also became whispered about that there was 
another combination of interests being formed, with 
its object in view to wrest from Harrunan and Stand- 
ard Oil control of their thousands of miles of railroads, 
providing they would let them. 

A thing that worried Standard Oil interests was 
the action of Amalgamated Copper which was taking a 
downward turn. ' 

Steel stocks were also moving downward, for no 
apparent reason. 

All sorts of rumors were set in motion to boost 
stocks. One was that Harriman and Morgan had buried 
the hatchet and would henceforth work together. 

That the March panic was now being felt by its 
promoters became evident; the production of steel had 
fell off 30 per cent through July and August. 

This made an unfavorable impression on steel 
stock. 

In the latter part of September the market took 
another heavy decline. 



The Crime of 1907-1908 37 

The independent steel companies were now receiv- 
ing large orders in competition against the steel trust. 

By the end of September the stock market reached 
a very low level. It commenced to look, though, as if 
the business interests had forsaken it entirely. Banks 
commenced to hold their money. 

Another thing that affected stocks was Lord Roths- 
child's interview quoted in a London newspaper. 

He stated that he had been informed that big in- 
vestors in New York were hoarding their money. 

It looked as if the big interests had sold what se- 
curities they could for cash and placed this money in 
such a position whereby they could get hold of it in 
case an emergency arose. Money was now very scarce. 
Copper stocks had reached their lowest level. 

October 14th. Panicky conditions commenced to 
assert themselves in the stock market. 

Wm. Rockefeller was selling Southern Pacific to 
realize cash. On October 16th came the suspension of 
the stock exchange firm of Gloos & Kleeburg. They 
had been buying United Copper for Otto Heinze and 
Company, and after doing so, Heinze and Company 
refused to take the stock. 

Heinze and Company repudiated $1,500,000 worth 
of United Copper. To protect themselves as much as 
they could in endeavoring to save their copper stocks, 
they sold blocks of Morse Consolidated Steamship Lines 
stock at a loss. Morse retaliated by unloading United 
Copper stocks. This precipitated a crisis in a market 
that was in a critical state. On Friday violent selling 
again took place in copper issues. 

So, through accumulating circumstances Heinze 
and their associates were forced off the board of direc- 
tors of the Merchantile National Bank. 



38 Wrecking the Nation 

Call money jumped to 10 per cent; Standard Oil 
interests felt that they were now on the trail of the 
people who had been cutting copper, so here was an 
opportunity to drive them to the wall. The bear inter- 
ests were now selling copper to make Heinze and his 
friends disgorge. 

TUESDAY, OCTOBER 28th. 

/ The stock market was in a demoralized condition. 
A run was started on the Knickerbocker Trust Com- 
pany, from the presidency of which Charles T. Barney 
was compelled' to resign on account of his affiliations 
with Charles T. Morse, promoter of Continental ship- 
ping stocks. Before the noon hour, call money had 
risen to 70 per cent. 

The real influence on part of heavy selling was 
the interests and financiers, who understood the real 
necessity of ready money in such a crisis as this. 
Stocks were now lower than they had been in March. 
The market was demoralized. 

Shortly after the noon hour, the Knickerbocker 
Trust Company closed the doors of their main office 
and branches, despite the assurance the big financiers 
had given that they would supply them with all the 
cash necessary to meet their demands. 

The big financiers saw a new state of affairs assert- 
ing itself. 

Call money at 70% would create heavy withdrawals 
from the banks on part of depositors, who saw an op- 
portunity of 'doubling their money. Here was a state 
of affairs the financiers had not figured on. 

It was right and proper for the banks to loan money 
at 70 to 100 per cent, but all wrong for the general 



The Crime of 190/-1908 39 

public to do so. Therefore a high rate of call money 
would have to be staved off by all possible means. 



WEDNESDAY, 23rd. 

The day opened with severe runs started on the 
Trust Company of America. 

This company was the depository and financial 
agent of the Tennesse Coal and Iron Company, one of 
the strongest rivals the steel trust had. This Company 
was now receiving most of Harriman's orders for steel 
rails. 

If a successful run could be carried on against the 
Trust Company of America, it would cripple the finan- 
cial resources of the Tennessee Coal and Iron Com- 
pany and' they would become easy prey for the steel 
trust. 

Call money now rose to 90 per cent. Bank of 
Commerce loaned $500,000 at 40 per cent, many private 
loans had also been made— $100,00 at from 40, 50, 60 
and 70 per cent. 

It was claimed that the Morgan people had plenty 
of cash at fabulous rates. Stocks were low and no 
buyers. 

Secretary of the Treasury Cortelyou, announced 
that he would loan New York banks $25,000,000 to 
relieve the stringency in money and to meet any other 
emergency that might arise. 

Things were now in a very critical condition. 
/That the big interests were now in dead earnest to 
stop demoralization is evident from the fact that at a 
conference held at Morgan's office to devise Avays and 
means to get out of this panic were E. H. Harriman, 
H. C. Frick, E. H. Gray, Thomas F. Ryan, Paul Morton, 



-±0 Wrecking- the Nation 



James Stillman, Hamilton Fish, August Belmont, W. A. 
Nash and others. 

These gentlemen represented two factions, but 
what they now feared most was an outraged public 
who might demand their money from the banks/ 

Runs had started on a number- of banks, therefore 
the tide had to be turned or they would, one and all, 
be ruined. The First National Bank loaned the stock 
exchange $1,000,000 at 75 per cent. 

The Bank of Manhattan loaned $1,500,000 at 70 
per cent. Chase National Bank loaned $1,000,000 at 
from 50 to 75 per cent. 

THURSDAY 24th. 

This was the day of frenzied finance. 

Runs were being made by depositors on the Trust 
Company of America, Lincoln Trust Company, Har- 
lem's Savings Bank, and others. The Trust Company of 
America had paid out to depositors over $9,000,000. 

Just imagine such a condition facing every New 
York bank. It would have meant their complete ruin. 

Our credit would have been destroyed, every rail- 
road and large industrial establishment would have 
been forced into the hands of government receivers. 

In twenty-four hours the government would have 
been compelled to have taken charge of every New York 
bank to save what was left of this pernicious system of 
high finaance. 

Call money rose to 100 per cent. 
/To save themselves, the big interests were com- 
pelled to disgorge their hoardings of money. Friends 
and enemies worked side by side, for heroic action was 
necessary. 



The Crime of 1907-1908 ■ 41 

With the $25,000,000 Secretary Cortelyou had loaned 
the banks, Morgan formed a syndicate which advanced 
the stock exchange this money at 10 per cent to bring 
down the high rate of call money. In addition, the 
Morgan pool renewed a loan of $30,000,000 at 20 per cent 
interest. 

It is estimated that Standard Oil and United States 
Steel put $105,000,000 into the market to protect their 
interests. 

To assist in turning the tide. New York clearing 
house commenced to issue clearing house certificates. 

The day ended with Southern Steel Company being 
forced into receivers' hands. 

EFFECTS OF THE PANIC. 

Through the crippling of the Trust Company of 
America, the Tennessee Coal and Iron Company was 
placed in a precarious position. They were handi- 
capped by not being able to get money to pay their 
obligations with, even in the face of having orders to 
the extent of 150,000 tons of rails. This shows how 
absolutely helpless our industries are in the hands of 
the bankers and high financiers. 

The steel trust very generously offered their assist- 
ance, providing they would be assimilated, so the 
Tennessee Coal and Iron Company, to get cash, was 
compelled to be absorbed by the steel trust. y 

Standard Oil is now in a position where they are 
almost the sole dictator of the copper market through 
the assimilation of the Heinze copper stock. They 
have also increased their holdings in Morse Continental 
Steamship lines. 



42 Wrecking the Nation 

Harriman still controls his railroads, but the ques- 
tion is, how soon will the steel trust interests again 
commence to plan to ruin this man, or how long before 
Harriman will be in a position to make an assault on 
steel trust interests? 

Investors and stock dealers have lost confidence 
and are following the example set by the wealthy mas- 
ters, by hoarding their money. 

The greatest sufferers from this battle of commer- 
cial giants are the small business and workingmen. 
These men, who had nothing to do with the precipitat- 
ing of this commercial struggle, can only see failure 
and ruin staring them in the face.' 

The workers for their share of our rich man's pros- 
perity have nothing but misery, want and starvation 
facing them. 

The latter part of October saw thousands upon 
thousands of men laid off from work, and this just be- 
fore the holidays, when the merchant was stocked to 
overflowing, expecting to do a big business. 

The panic could not have occurred at a better time, 
if the intent had been to ruin the small business man./ 

The working class is the largest consuming class, 
and when they stop work they cannot buy the mer- 
chant's wares. The small business man is now placed 
in a position where he must cancel his orders until 
he is placed in a position to get cash out of the goods 
he has on his shelves. This will mean that before 
spring the idle army will be increased by a great many 
more, for every order canceled means less work for the 
worker. The more workers cut out of work means less 
money to buy the merchant's wares with./ • 

But with all this misery, want and starvation, the 
struggle is not settled. It is still the fight of Harri- 



The Crime of 1907-1908 43 

man, Rockefeller, Standard Oil interests against Mor- 
gan-Hill steel trust interests. 

One of the other will own the nation, even if they 
must wreck it in the attempt. 

Which will win in this battle royal? 



THE REMEDY AGAINST STOCK JOBBING 
PANICS. 

That the great American people must sooner or 
later meet one or the other of these gigantic interests 
in open combat is plain. 

That their contention today is for complete mas- 
tership, we must admit. 

Whichever of these two wins in this combat, 
will receive as his prize, the great American industrial 
institutions, with its highly developed producing masses 
thrown in. 

After one of these interests becomes master, they 
will then be placed in a position, with th^ir vast accumu- 
lation of dividends and profits through trustified indus- 
try, to bring about so rapid a concentration of other 
industries under their control that the complete owner- 
ship of the nation on their part will be but a matter of a 
few years, so it behooves us, whether we are a small 
business man, or whether we are workingmen, to con- 
sider this problem today. 

Let us in justice to ourselves and our future gen- 
eration, fortify and prepare ourselves to meet this com- 
ing industrial giant with intelligence. 

Don't look at the stars and with faith in your heart 
state that you can regulate him. 

Divided on economic action, we are like Gulliver 
amongst the giants. They were too powerful for Gulli- 



44 Wrecking the Nation 

ver to regulate and as the story reads, the giants 
laughed at Gulliver when he challenged them to fight. 

And so your big combination will laugh at Gullivei 
laws and walk rough shod over them. That the small 
business man is doomed is certain, but while he still 
has a little power he must assert that with his comrade 
in the struggle, the working class. 

That the working class must throw aside petty 
class distinction among themselves is evident, for evo- 
lution is bringing about a great leveling process that 
before many days will bring them on an equal plane. 

The mechanic of yesterday is not the same today, 
and tomorrow the 'change will be far greater. The 
improved machine, owned by the industrial master, will 
displace him as the improved trust business method 
displaces the small business man. 

But the hope of the future lies in this worker ; he 
must come to a sane principle of organization and save 
the day for himself and his children, or else they will 
inherit an industrial bondage that is sorrowful to con- 
template. 

The worker must organize industrially in the shops 
and factories and mines of the nation. He must adopt 
the co-operative principle of organization to meet his 
more highly organized master. 

And with this industrial organization he must give 
political expression at the ballot box, and this political 
expression must stand for the social ownership of this 
vast machine, and through this social ownership inaugu- 
rate a system of production for use and not for profit. 

In other words— SOCIALISM. 



LIBRARY OF CONGRESS 

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014 060 416 1 $ 



Copyright, 1908 
By PETER KINNEAR 




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LIBRARY OF CONGRESS 




014 060 416 1 



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